RELIABILITY AND MASLOW MEDIA GROUP, INC.
BALANCE SHEETS
December 31, 2018 Consolidated
Maslow | Reliability | Adj. | Consolidated | |||||||||||||
ASSETS | ||||||||||||||||
CURRENT ASSETS | ||||||||||||||||
Cash | $ | 28,710 | $ | 8,098 | $ | 36,808 | ||||||||||
Contract receivables | 5,864,856 | 5,864,856 | ||||||||||||||
Due from employees | 6,119 | 6,119 | ||||||||||||||
Prepaid expenses | 234,996 | 234,996 | ||||||||||||||
Current maturity of notes receivable from related parties | 3,314,984 | 3,314,984 | ||||||||||||||
Total current assets | 9,449,665 | 8,098 | 9,457,763 | |||||||||||||
PROPERTY AND EQUIPMENT, at cost | ||||||||||||||||
Office equipment | 1,375 | 1,375 | ||||||||||||||
Computer equipment | 41,709 | 41,709 | ||||||||||||||
Computer software | 41,340 | 41,340 | ||||||||||||||
Leasehold improvements | 5,725 | 5,725 | ||||||||||||||
Total property and equipment, at cost | 90,149 | 90,149 | ||||||||||||||
Accumulated depreciation and amortization | (57,029 | ) | (57,029 | ) | ||||||||||||
Total property and equipment, net | 33,120 | 33,120 | ||||||||||||||
OTHER ASSETS | ||||||||||||||||
Notes receivable from related parties, less current maturities | - | |||||||||||||||
Total assets | $ | 9,482,785 | $ | 8,098 | $ | 9,490,883 |
Notes
For Maslow, current assets increase of $4,391,992 over 2017 was predominantly driven by “Current maturity of notes receivable” from former parent being $3,314,984; $925,341 of which was an increase of the 2017 note for $2,389,643 that in 2017 was booked to Other Assets. |
Current ratio improvement over 2017’s .89 to 1.23 can be attributed to increased revenue and cash flow.
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RELIABILITY AND MASLOW MEDIA GROUP, INC.
BALANCE SHEETS, continued
December 31, 2018
Maslow | Reliability | Adj. | Consolidated | |||||||||||||
LIABILITIES AND STOCKHOLDER’S EQUITY | ||||||||||||||||
CURRENT LIABILITIES | ||||||||||||||||
Current maturities of long-term debt | $ | 793,642 | $ | 793,642 | ||||||||||||
Loan from stockholder or affiliates | $ | 50,000 | 50,000 | |||||||||||||
Accumulated Interest on Loans | 22,864 | 22,864 | ||||||||||||||
Factoring | 4,153,224 | 4,153,224 | ||||||||||||||
Accounts payable | 706,563 | 15,961 | 722,524 | |||||||||||||
Accrued Payroll | 338,923 | 338,923 | ||||||||||||||
Accrued liabilities | 775,220 | 775,220 | ||||||||||||||
Deferred Income | 235,393 | 235,393 | ||||||||||||||
Income taxes payable | 663,882 | 663,882 | ||||||||||||||
Total current liabilities | 7,666,847 | 88,825 | 7,755,672 | |||||||||||||
Long-term debt, less current maturities | - | 65,218 | 65,218 | |||||||||||||
Deferred income taxes | 343,664 | 343,664 | ||||||||||||||
Total liabilities | 8,010,511 | 154,043 | 8,164,554 | |||||||||||||
STOCKHOLDER’S EQUITY | ||||||||||||||||
Common stock, $1 par value, 400 shares authorized, 100 issued and outstanding | 100 | 100 | ||||||||||||||
Common stock, without par value, 300,000,000 shares authorized; 17,268,993 shares issued | 9,912,150 | 9,912,150 | ||||||||||||||
Retained earnings | 1,472,174 | (8,963,578 | ) | (7,491,404 | ) | |||||||||||
Less: Treasury stock at cost, 354,300 shares | (1,094,517 | ) | (1,094,517 | ) | ||||||||||||
Total stockholder’s equity | 1,472,274 | (145,945 | ) | 1,326,329 | ||||||||||||
Total liabilities and stockholder’s equity | $ | 9,482,785 | $ | 8,098 | $ | 9,490,883 |
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RELIABILITY INC.
STATEMENTS OF INCOME
For the Year Ended December 31, 2018
Maslow | Reliability | Adj. | Consolidated | |||||||||||||
Revenue | ||||||||||||||||
Workforce Management | 37,637,982 | 37,637,982 | ||||||||||||||
Cost of Revenue | ||||||||||||||||
Workforce Management Cost | 33,773,519 | 33,773,519 | ||||||||||||||
Gross profit | 3,864,463 | 3,864,463 | ||||||||||||||
General and administrative expenses | 2,670,376 | 23,236 | 2,693,612 | |||||||||||||
Operating Profit | 1,194,087 | (23,236 | ) | 1,170,851 | ||||||||||||
Other Income (Expense) | ||||||||||||||||
Interest Income, related parties | 80,772 | 80,772 | ||||||||||||||
Interest expense | (328,060 | ) | (9,558 | ) | (337,618 | ) | ||||||||||
Legal Fees | (50,239 | ) | (50,239 | ) | ||||||||||||
Management fees | (240,599 | ) | (240,599 | ) | ||||||||||||
Other | (87,423 | ) | (87,423 | ) | ||||||||||||
Income before taxes on income | 568,538 | (32,794 | ) | 535,744 | ||||||||||||
Income tax benefit/(expense) | (182,457 | ) | 100 | (182,357 | ) | |||||||||||
Net income | $ | 386,081 | (32,694 | ) | $ | 353,387 |
Notes
For Maslow, revenues increased by $2.578M as the company’s largest clients, AT&T, Goldman Sachs, and DirecTV drove the 7.3% lift.
This, coupled with greater resource efficiency, enabled the $310,161 increase in year-over-year operating profit to $1.194M, and the $306,447 year-over-year increase in net income to $386,081. This represents a 384% increase in net income from 2017 (not shown here).
Legal and Other expenses were related to reverse merger.
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RELIABILITY INC.
STATEMENT OF CASH FLOWS
Years Ended December 31, 2018
Maslow | Reliability | Adj | Consolidated | |||||||||||||
A. Cash flows from operating activities: | ||||||||||||||||
Net Profit / (Loss) | $ | 386,081 | $ | (32,694 | ) | $ | 353,387 | |||||||||
Adjustments to reconcile net income to net cash used in operating activities: | ||||||||||||||||
Deferred Income Taxes | (166,295 | ) | (166,295 | ) | ||||||||||||
Depreciation on Assets | 25,361 | 25,361 | ||||||||||||||
Loss on Sale of Fixed Assets | (26,606 | ) | (26,606 | ) | ||||||||||||
Operating Profit before Working Capital Changes | 218,541 | (32,694 | ) | 185,847 | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Contract receivables | (1,133,070 | ) | (1,133,070 | ) | ||||||||||||
Due from related parties | (925,341 | ) | (925,341 | ) | ||||||||||||
Due from employee | (6,119 | ) | (6,119 | ) | ||||||||||||
Prepaid expenses | (1,221 | ) | (1,221 | ) | ||||||||||||
Accumulated Interest on Loans | 22,864 | 22,864 | ||||||||||||||
Accounts payable | 27,885 | 8,291 | 36,176 | |||||||||||||
Accrued Payroll | 131,234 | 131,234 | ||||||||||||||
Accrued Liabilities | 182,087 | 182,087 | ||||||||||||||
Deferred Income | 216,726 | 216,726 | ||||||||||||||
Accrued Interest Payable | 74,156 | 74,156 | ||||||||||||||
Income Taxes Payable/Tax Paid | 305,528 | (100 | ) | 305,428 | ||||||||||||
Cash Generated from Operations | (1,128,135 | ) | 31,055 | (1,097,080 | ) | |||||||||||
Net Cash from Operating Activities | (909,594 | ) | (1,639 | ) | (911,233 | ) | ||||||||||
B. Cash flows from investing activities: | ||||||||||||||||
Purchase of fixed assets | 2,725 | 2,725 | ||||||||||||||
Net Cash from Investing Activities | 2,725 | 2,725 | ||||||||||||||
C.Cash flows from financing activities: | ||||||||||||||||
Long Term borrowings | (2,514 | ) | (48,306 | ) | (50,820 | ) | ||||||||||
Loan from Shareholders | 50,000 | 50,000 | ||||||||||||||
Net advances on Line of Credit | 845,981 | 845,981 | ||||||||||||||
Net cash from / (used) by financing activities | 843,467 | 1,694 | 845,161 | |||||||||||||
Net decrease in cash and cash equivalents | 55 | (63,402 | ) | (63,347 | ) | |||||||||||
Cash and cash equivalents at beginning of year | 92,112 | 8,043 | 100,155 | |||||||||||||
Cash and cash equivalents at end of year | 28,710 | 8,098 | 36,808 |
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